LT Weekly: Oct 10, 2025

In case you missed our email earlier this week, we wanted to flag our latest LionTree’s Lens: Sector Insights & A Look Ahead, Fall 2025 deck, which highlights what we view as the most important market trends and thematic shifts across the TMT and consumer landscape during the last quarter, and some perspectives as we look ahead.

Click HERE for our slide deck and the ~20-minute video presentation.

Markets have largely held their ground through Q3, even as investors continue to weigh mixed economic signals and shifting policy expectations. Dealmaking momentum has strengthened, with large-cap tech, media, and consumer names driving a rebound in both IPO and M&A activity.

In this edition, we look at how the AI story is evolving from infrastructure to monetization, the growing overlap between sports, streaming, and media rights, the new era of wireless connectivity, the staying power of live events, the growing rollout of robotaxis and autonomous mobility platforms, and much more.

-> As always, we’re happy to discuss any of these topics in more detail, and we’d appreciate your thoughts and/or feedback. Feel free to reach out.

Key Themes

Macro & Markets

• The Stock Market Is Incredibly Resilient But Multiples Hit A High
• The Media/Entertainment Sector Led The Market In Q3
• The Interest Cut Cycle FINALLY Begins, Though With Some Caution
• IPOs Breakout Thanks To Tech & Crypto/FinTech…
• …And Larger Deals In General Made A Comeback, While Smaller Deals Struggled

Key Themes Across The Sector

• Media/Entertainment Dealmaking Accelerates Around Scale and IP
• AI Demand Continues To Challenge Data Center Capacity And Drive CapEx…
• …But Will Returns On This Unprecedented Level of Investment Be High?
• And Some Of The Sharpest Minds Are Warning Of An AI Reality Check
• We Are At A Pivotal Moment For Sports Streaming
• Individual Consumer Subscriptions Are Fatiguing… As Bundling Is Gaining Traction
• Live Entertainment Demand Is Showing No Signs Of Slowing Down, But There Are Some Shifts In Consumer Habits
• The 800 Pound Gorilla Ups The Ante In Online Grocery
• The Big Beautiful Bill = A Wind Fall For The Connectivity Sector
• Wireless Connectivity Is Entering A New Era Given High Penetration Rates
• Expect Robotaxi & AV Investments To Continue At A Rapid Clip
• Meta’s Metaverse Makes Scientific Breakthroughs, But Are People Ready?
• Prediction Markets Are Taking Betting Opportunities To A New Level

Wall Street Sentiment

• Wall Street’s Top TMT Picks & Pans
• New Price Targets Imply More Upside Across The Sector

OpenAI’s 2025 Dev Day underscored just how rapidly the AI sector is evolving, with the company’s latest announcements enabling a new pace for both innovation and adoption of AI products and tools. The Co’s developer ecosystem and user base have seen exponential growth, now at over 4mn developers and 800mn+ weekly ChatGPT users, which is up 2x and 8x, respectively, from just two years ago. API usage has also surged, currently processing 6bn tokens per minute vs only 300mn 2 years ago, highlighting the scale at which AI is now being integrated into real-world applications. Yet, as CEO Sam Altman remarked, “we are still so early on this train.”

In terms of the major product launches, the new Apps SDK allows 3P apps to be integrated directly within ChatGPT, creating seamless user experiences and broadening app reach. AgentKit simplifies the creation and deployment of autonomous AI agents, making it easier to move from prototype to production. The upgraded Codex, now generally available, accelerates software development with advanced code generation and collaboration tools. Meanwhile, new APIs for GPT-5 Pro, Sora 2, and gpt-realtime-mini deliver enhanced reasoning, multimedia generation, and expressive voice capabilities, supporting a wide range of innovative applications across industries.

Overall, Altman’s bold statement that “this is the biggest change to how software gets created that I have ever seen” sets the bar high but this could mark a fundamental shift in the industry, where software that used to take months or years to build can be created in minutes. On a simplistic level, the Co highlighted an 89-year-old Japanese retiree who taught himself to code using ChatGPT and went on to develop 11 iPhone apps specifically designed for elderly users! The day was a big one for OpenAI and also for some public companies that were cited during the presentation, as well as for AMD who secured a multi-year, multi-gigawatt chip partnership with OpenAI.

See below for our main takeaways from the keynote and, if interested in more, see Link To Keynote.

OpenAI’s New Stats, New Product Updates, And New Features

• OpenAI released impressive user & developer growth statistics…from DevDay in 2023 to today –
  • Number of developers who have built w/OpenAI has incr’d 2x to 4mn+
  • Weekly active ChatPGT users has incr’d 8x to 800mn
  • The number of API tokens per minute has incr’d 20x to 6bn (from 300mn)

-> Separately, but related to the demand side, NVIDIA CEO Jensen Huang said this week on CNBC that, “this year, particularly the last six months, demand of computing has gone up substantially”, which also caused some excitement. (link)

• Intr’d Apps SDK …This enables integration of 3P apps directly w/in ChatGPT: It essentially connects data, triggers actions, and renders an Interactive UI for apps directly in ChatGPT and enhances user experience by consolidating functionalities
  • OpenAI called out several specific apps that users can interact with in ChatGPT & moved a few of the stocks on the day:
    • Booking.com: -0.1%
    • Canva: Private
    • Coursera: +0.4%
    • Expedia: +2.1%
    • Figma: +7.4%
    • Spotify: -0.3%
    • Zillow: -3.6%
  • Availability:
    • Apps SDK is now available in preview to start building
    • Later this year, developers can submit apps for review and publications

• Intr’d AgentKit…This is a toolkit to make building AI agents simpler and more effective: Provides resources for creating, testing, and deploying AI agents, hence taking them from prototypes to production
  • Available now
  • Launch partners include (with stock price reaction where applicable):
    • Ramp: Private
    • LY Corporation: Not listed in the U.S.
    • Canva: Private
    • Box: +1.6%
    • HubSpot: +2.6%

• Intr’d Codex…This is an upgraded AI coding assistant… “anyone with an idea can build apps for themselves”
  • Availability: Codex is now officially out of research preview and into GA
  • Runs on GPT-5-Codex model…improves code generation, refactoring, and review processes: It works everyone that developers code now; GPT5 Codex has become one of their fastest growing models ever
    • Since its release, they have already served 40T+ tokens
    • Almost all new code written by OpenAI today is written by Codex users
  • Intro’d a new set of features to make Codex more helpful for engineering teams and promote collaboration: 1) have a slack integration; 2) a new codex SDK to extend and automate codex in a team’s workflow; 3) new admin tools and reporting; Expect to see more improvements soon
  • Use case example: Cisco rolled out Codex across its entire engineering and now they are able to get through code reviews 50% faster and reduce the avg project timeline from weeks to days
• New models in API…
  • gpt-realtime-mini…A compact, low-latency voice model: Offers expressive voice interactions at 70% reduced cost vs previous models; Enables developers to incorporate voice capabilities into their products efficiently; Available now via API
  • GPT-5 Pro…Supports developers in building more reliable and sophisticated applications
  • Sora 2 …Includes enhanced video & audio generation: Produces realistic, synchronized video and audio content; Empowers creators with improved tools for multimedia content generation

-> There was also quite a bit of focus and controversy regarding Sora this week…it was disclosed that the app hit 1mn downloads less than 5 days after its launch in late Sept, which is a faster rate than ChatGPT, despite still only being available on iOS devices and invite-based; But also, the Motion Picture Association said on Monday that “videos that infringe our members’ films, shows, and characters have proliferated on OpenAI’s service”…and “OpenAI needs to take immediate and decisive action to address this issue”; AND, per sources, Disney has opted out of having its IP appear in the Sora app; OpenAI is reportedly working to address all of this (link/link)

OpenAI Also Annc’d A Strategic Partnership With AMD (link / link)

• Length: “Multi-year”
• Terms: AMD to deliver 6 gigawatts of Instinct GPUs, starting with the MI450 series in H2 2026
  • The collaboration grants OpenAI access to current and future AMD chips
  • Promotes enhanced software-hardware integration and accelerates OpenAI’s AI capabilities
• Other consideration = OpenAI gets AMD warrants and could acquire ~10% of AMD if exercised in full: AMD issued OpenAI a warrant for up to 160mn shares of AMD common stock that will vest as –
  • The first tranche vests w/ the initial 1 gigawatt deployment
  • Additional tranches vest as purchases scale up to 6 gigawatts
  • Vesting is further tied to AMD achieving certain share-price targets and to OpenAI achieving the technical and commercial milestones required to enable AMD deployments at scale
• Deal size? OpenAI said the deal was worth billions, but declined to disclose a specific dollar amount

-> AMD shares traded up +23.7% and is up +80% YTD

Adobe’s widely followed U.S. holiday shopping forecast for 2025 was a focal point this week, setting a confident tone. Total U.S online spending is expected to surpass $250bn this season, up a solid +5.3% y/y, though moderating from last year’s +8.6%. The firm expects over half of online purchases to happen on mobile for the first time, and “buy now, pay later” usage is projected to hit new highs, including a record-breaking $1bn+ on Cyber Monday alone. Demand overall will likely still concentrate around Cyber Week but GenAI is expected to reshape the top of the funnel. How accurate was Adobe’s estimate going into the holiday’s last year? Pretty close. The Co initially forecast +8.4% y/y growth and the actual was +8.7% y/y.

In other related reports published this week, PwC cites how Gen Z is shifting behavior favoring discounts and in-store discovery, while Circana highlights inflation concerns pushing consumers to shop earlier and lean into promotions.

Taken together, the data points point to a holiday selling season that’s digitally driven, mobile-first, and shaped by a more intentional, though still resilient, consumer.

See below for more details on what we thought was most incremental from these holiday spending reports.

Adobe Forecasts 2025 Holiday Season Online Spending To Cross $250bn But Y/Y Growth Will Normalize (link/link)

• A record $253.4bn (up +5.3% y/y) is anticipated to be spent online this holiday season (Nov-Dec): Although it could fluctuate between $250.3bn-255.9bn
  • This is a deceleration from last yr’s very high +8.6% y/y to $241.1bn

Source

• Category breakdown – electronics will generate the most sales while groceries will drive the most y/y growth
  • Electronics: $57.5bn, up +4% y/y
  • Apparel: $47.6bn, up +4.4% y/y
  • Furniture and Home goods: $31.1bn, up +6.5% y/y
  • Grocery: $23.5bn, up +9.3% y/y
  • Toys: $8.8bn, up +7.3% y/y
  • Cosmetics: $8.4bn, up +9.1% y/y
  • Sporting Goods: $8.2bn, up +5.1% y/y

• Cyber Week (Thanksgiving to Cyber Monday) is projected to hit $43.7bn, up +6.7% y/y (deceleration from last yrs +8.3% y/y to $41.1bn) (link)
  • Black Friday will see the highest growth over the Cyber Week at $11.7bn, up +8.3% y/y
    • Compared to the $10.7bn spent in 2024, up +9.2% y/y
  • Cyber Monday growth is projected to hit $14.2bn, up +6.3% y/y
    • Compared to the $13.3bn spent in 2024, up +7.3% y/y

Source

• 2025 is positioned to become the first full yr w/ more than 50% of online spending happening on mobile devices
  • Mobile rev share is projected to hit a record 56.1% for the holiday season w/ 7 out of 10 online retail visits happening on mobile devices
  • A record $142.7bn will be spent via mobile this holiday season, up +8.5% y/y

• Consumers are less sensitive to price changes, likely due in part to consumer willingness to purchase full-price items or even items that have incr’d in price w/ the expectation that prices may be much higher in the future
  • Sensitivity to price change has decreased by -12.8% on avg so far in 2025
  • The decline in sensitivity to discounted prices has been slightly steeper at -13.2%

• Buy now, pay later momentum is also building heading into the holiday: Forecasted to see $19.8bn-20.4bn in BNPL spend (up +9-12% vs the 2024 holiday season)
  • Black Friday is forecasted to see between $748mn-775.5mn in BNPL spend, up +9-13% y/y
  • Cyber Monday is expected to set a record for the most spent on a single day through BNPL w/ a forecast of $1.02bn-1.06bn (up +3-7%)
    • Projected to be the first day to cross $1bn in BNPL spend
  • The majority of BNPL is being driven by people on their smartphone, rather than a desktop, tablet or laptop

Source

• GenAI is expected to play a much greater part in holiday shopping this season
• In August, traffic from GenAI sources to retail sites is up +1500% y/y, w/ nearly +300% growth since Jan
  • This holiday season, traffic is expected to rise +515-520% y/y, w/ Thanksgiving alone growing an expected +725%-730% y/y
    • 75% of consumers are familiar w/ AI assistants, ~33% have used them for online shopping
    • ~80% of consumers say they use AI assistants more frequently during or leading up to high-stakes shopping events
  • 72% of consumers who have used AI for online shopping said they are less likely to return items purchased

Source

• Methodology: The have a robust dataset from over 1 trillion US retail sites, 100mn product SKUs and 18 different categories; The survey was based on the responses from ~5,000 U.S. consumers, fielded between Sept 9^th – Sept 16^th, 2025

PwC’s Latest Report States Gen Z Is Pulling Back The Most This Season (link/link)

• ~ 79% of Gen Z will wait for products to go on sale, and only 21% regularly pay full price
  • Searching for discount codes is up +14%, while browsing is up +17%
  • 59% still prefer known brands but 41% are willing to buy less expensive, private-label alternatives and 49% want customized products

Source

• But Gen Z isn’t spending less across the board, they’re reallocating
  • When asked where they’d cut back over the next 6 months, Gen Z pointed to restaurants and take-out (51%), clothes (33%), and alcohol (29%)
    • Few said they would cut out “high value” items

• Also, the assumption that Gen Z would live entirely online is outdated
  • 61% now prefer to discover new products in-store
  • 37% plan to shop in-store more frequently than usual this holiday season (up from 27% in 2024)

• 43% of Gen Z is expected to use social media to discover gifts this holiday, compared to 30% overall
  • They also use it to research (39% vs 27%) and compare items before purchasing (32% vs. 22%)

• 11% of Gen Z say that BNPL is one of their top 3 payment methods for this holiday season, up +5% y/y

A Report By Circana Shows Consumers Are Bracing For Higher Prices

• 80% of shoppers expect prices to rise, driven by tariffs and inflation (link/link)
  • This is pushing many to shop earlier and lean harder on promotional events, like those from Amazon, Walmart and Target
  • 34% of holiday shoppers say they will take advantage of more deals this yr

• On avg, consumers plan to spend $796 on holiday shopping this yr, which is up 3% y/y
  • 31% of shoppers say they will buy fewer items this holiday

• Holiday shoppers have also expanded the timeframe of their shopping season
  • ~50% of consumers plan on starting their holiday shopping before Thanksgiving, and 24% have already started or even finished, up +~4% y/y
  • Black Friday remains the most popular of the traditional shopping days, w/ 19% planning it as the kick-off
  • The number of consumers planning to wait until Dec, thereby getting a late start to holiday shopping, is 19%, the lowest it has been in recent yrs

It has been a while since we combed through short interest data, so we decided to do so for the period ending September 30, which was made available this week. Given all that has transpired over the last 6 months, it was interesting to see where the shorts have been placing their bets as we head into the rest of the year, and where they have gotten more bearish, and where they have been covering positions. The analysis includes ~160 stocks in the LionTree Universe with $1bn+ in market cap across the tech, media, telco, and consumer sectors.

Short sellers generally stuck with their positions. The Top 3 most shorted stocks at quarter end were Hims & Hers, Lemonade, and The RealReal, and the first 2 were also on the Top 3 list last qtr. Of the Top 20 most shorted stocks in Q3, 14 were also on the top 20 most shorted list in Q2.

In terms of the biggest changes in Q3, Cinemark saw the most short covering, while Six Flags Entertainment topped the list for largest increase in its short position.

See the bullets below and table for more detail…

Most Shorted Stocks (As % Of Float) – Hims & Hers 

• The Top 3 Most Shorted – #1 is Hims & Hers, #2 is Lemonade, & #3 is The RealReal -> Hims & Hers ascended from the #2 position in Q2 to take the top spot; Lemonade also rose from the #4 position last qtr to take the #2 spot; The RealReal was not included in the Q2 analysis as its market cap was <$1bn but broke into the list this qtr
  • Groupon, which was the #1 most shorted stock in our LionTree Universe last qtr, was not included in our Q3 analysis due to its market cap being <$1bn but still maintains a very high short position

• Stocks that dropped out of the Top 20 most shorted: AMC Entertainment, Cinemark, Groupon, Magnite, Paramount Global, Reddit, Redfin
  • Note that Groupon also dropped out of this analysis from last qtr due to its market cap falling below <$1bn

• Stocks that joined the Top 20 most shorted: DigitalOcean, fuboTV, Opendoor Technologies, Reddit, Six Flags Entertainment, The RealReal, TripAdvisor
  • Note that The RealReal and Opendoor Technologies were also added to the Top 20 this qtr but not included in last qtr’s analysis due to their mkt cap being <$1bn at the time

-> With the market rallied, it was once again a hard qtr for short sellers in Q3, as only 7 of the Top 20 most shorted stocks underperformed the S&P 500’s +7.8% gain during the period; In fact, the Top 20 most stocks traded up +89% on avg (or +20% on avg ex-Opendoor), also outperforming the S&P 500 

Largest Increase In Short Interest (As % Of Float) – Six Flags Entertainment 

• The largest increase in short interest was seen by Six Flags: The Co saw a +5.8ppt increase in Q3 to 20.1% and was also the #9 most shorted stock at the end of Q3 -> The stock fell -25.3% in the qtr, underperforming the S&P 500’s +7.8% gain

• Other stocks with notable increases in short interest = Playtika, IMAX, and Mobileye -> Playtika and Mobileye underperformed the S&P 500, while IMAX outperformed

Largest Decrease In Short Interest (As % Of Float) – Cinemark

• The largest decrease in short interest was for Cinemark: The Co posted a -5.8ppt decrease in Q3 to 20.1%; It went from being #7 most shorted stock in Q2 to dropping out of the Top 20 in Q3

• Other stocks with notable decreases in shorts interest = Paramount Global, WEBTOON Entertainment, and Gogo

In addition to all the holiday spending predictions (see Theme #3) we also looked at Piper Sandler’s 50^th semi-annual Taking Stock With Teens survey, which gathers insights from 10k+ teens (w/ an avg age of 15.7 yrs) on their spending habits, fashion choices, tech usage, and brand and media preferences.

Overall, teen self-reported spending fell y/y, after growing both in the spring and year-ago fall. Interestingly, teens’ economic outlook is more polarized, w/ a higher percentage expecting conditions to get worse, as well as a higher percentage expecting it to better, compared to spring, though the overall bias remains negative.

Looking into the fashion and beauty side of retail, Amazon remained the #1 shopping website and gained share, followed by Nike at #2. That said, despite leading both as the top clothing brand and top footwear brand, Nike continued to lose mindshare across the board.

Regarding teenage female trends, the core beauty wallet also declined in the fall (after reaching its highest level ever in the spring). We would also flag that Coach has been having a stellar run, reaching 43% share of responses, up from 35% in the spring and just 25% in the yr-ago fall.

On the technology front, it was interesting to see that in the spring (prior to the release of the iPhone 17), 25% of teens expected to upgrade to the iPhone 17. That percentage has now fallen to just 17% in the fall, as it seems some teens have lost excitement around the phone posting its release. Finally, in social media, TikTok remains the most used platform, though Instagram has been gaining share, going from 28% share of responses in the spring to 31% in the fall.

See below for what we thought were the most interesting insights and click HERE/HERE to see the press release.

Teen Spend & Employment Levels Have Fallen Since Spring 2025, But Avg Household Income Is Up

• Total levels of teen spend DECREASED: Teens self-reported spending fell -6% y/y to $2,213 (down from +6% in spring 2025 and +1% y/y in fall 2024)

• But avg household income was up seq: Reached $69,527 in fall 2025, up from $65,995 in spring 2025

• % of teens that are currently employed part-time FELL: 33% (vs 37% spring 2025)

• Teens’ economic outlook is increasingly polarized, with both pessimism and optimism rising, but the bias is negative
  • Worse: 62% (vs 57% in spring 2025)
  • Unchanged: 15% (vs 23% in spring 2025)
  • Better: 23% (vs 19% in spring 2025)

Clothing & Footwear…Amazon Remains The Top Shopping Website And Gained Share, While Nike Lost Share Across Categories

• Amazon retained its #1 spot as the top shopping website (and gained share): Reached 54% share of responses, up from 52% in spring 2025
  • Nike remained in the #2 spot (but lost some share): 5% share of responses, down from 6% in spring 2025
  • Shein’s remained at #3 (and share was in-line) at 5%

• Nike remains the top clothing brand (but lost share): Fell from 28% share of responses in spring 2025 to 26% share in fall 2025
  • Hollister remained at the #2 spot (and gained share): Went from 8% share in spring 2025 to 12% share in fall 2025
  • Brandy Melville took the #3 spot: Reached 6% share, knocking out American Eagle, which was #3 in spring 2025 at 6% share

• Nike also continued to lose mindshare amongst footwear brands (but still remains at the top by a large margin): Nike garnered 46% share of top footwear brands, which is a continued downward trend from 49% in spring 2025 and 57% in fall 2024
  • Adidas retained its #2 position while also gaining share: Reached 14% share vs 8% in spring 2025
  • New Balance dethroned UGG to take the #3 spot: Reached 8% share, bumping out UGG, which was the previous #3 at 6% in spring 2025

• Also in footwear, On Running (#4) overtook HOKA (#5) for the first time in the past six surveys
  • “Suggesting On Running is gaining share with all consumers”

• Coach’s share continues to make big moves upwards amongst handbag brands: Reached 43% share in fall 2025, which is up from 35% in spring 2025 and 25% in fall 2024
  • Louis Vuitton rose to the #2 spot (and maintained share): Up from the #3 position in spring 2025 at 7%
  • Lululemon made a comeback to the top 3: Reached 6% share to take the #3 spot after falling out of the top 3 in spring 2025

Beauty…Spend Fell In The Fall (After Hitting A Record In Spring)

• Core beauty wallet declined -2% y/y to $336
  • Comes after core beauty wallet reached the highest level ever at $374 (+10% y/y) in spring 2025
  • 85% of female teens reported wearing makeup sometimes or every day, which is up +1pt seq

• Sephora once again continued to gain share as a top beauty destination: Sephora’s share of responses is now at 40%, up from 38% in spring 2025 and 36% in fall 2024
  • Ulta maintained share seq at 26% to take the #2 spot
  • Target made a comeback to take the #3 spot: After Bath & Body works pushed Target out of the Top 3 in spring 2025, Target returned to the list this time around with 7% share

• e.l.f. maintained its position as the #1 cosmetics brand among all female teens, gaining 1-pt of mindshare seq

Technology & Social Media…iPhone 17 Upgrades Are Expected To Be Lower Than Expected Back In The Spring Timeframe / TikTok Remains The Most Popular Social Media Platform, But IG Is Gaining Share  

• A lot fewer teens expect to upgrade to an iPhone 17 this fall/winter: Just 17%, which is a notable step down from 25% in spring 2025
  • 87% of teens own an iPhone (vs 88% in spring 2025)

• TikTok remains the most used social media platform, though Instagram is back to gaining share
  • TikTok had 46% share of responses in fall 2025 (vs 47% in spring 2025)
  • Instagram had 31% share (UP from 28% in spring 2025 after falling from 32% in fall 2024 and 30% in spring 2024)
  • Snapchat had 14% share (in-line w/ spring 2025)

• Daily video consumption trends were relatively stable from spring 2025
  • Teens spend 30% of daily video consumption on Netflix (vs 31% in spring 2025)
  • YouTube was at 27% (vs 26% in spring 2025)
  • Disney+ was at 7% (in-line w/ spring 2025 when Hulu was still separate)

Source

We all know that Amazon Prime Video and Netflix have been the leaders in the US streaming market, but it was interesting to see market share shifts for the major players in Q3, which point to a high level of competitive intensity in the sector.

Based on JustWatch’s Q3 2025 U.S. Streaming Market Share Report published this week, Prime Video and Netflix each saw a 1-percentage point sequential and 2-point y/y decline in market share. Meanwhile, mid-tier platforms like Disney+, Hulu, and HBO Max slightly improved their positions, while Apple TV+ remained steady and Paramount+ lost share.

These insights are derived from user engagement (20mn U.S. users) on JustWatch’s website, TV, and mobile apps. JustWatch calculates market share based on streaming behaviors such as adding titles to watchlists, clicking out to services, applying platform filters, and marking content as “seen.” See a few more details below (link/link).

-> On the topic of streaming, the press also reported this week that on Oct 19^th, Apple will finally announce a deal with F1 for $140mn per year, nicely up from the previous $90mn deal w/ ESPN; The fate of F1 TV has apparently been the sticking point and it is still unclear where the sides landed on that (link)

• While Amazon Prime Video & Netflix lead the US streaming video market share-wise at ~20% & ~19%, respectively…

Source

• Both leaders lost traction this qtr with market share down -2% y/y and down -1% q/q
  • The largest growth came from the “Other” category, led by BritBox, which recorded the strongest relative growth at +126% YoY
  • Paramount+ lost the most market share, down -1% QoQ and down -3% YoY

The advertising space was absolutely whirring with activity this week, with updates across adtech, AI, and media. PayPal, American Express, and Duolingo all rolled out new ad platforms, while both Microsoft and Adobe announced partnerships with Amazon. As always, AI is a topic of conversation, and Pubmatic shared that its integration with NVIDIA is delivering 5x faster and smarter advertising decisions, which subsequently sent Pubmatic’s stock up +8%. Separately, but related, a survey amongst CMOs found that while AI adoption in advertising continues to grow, scaling remains a challenge, and most CMOs still use AI for analytics rather than creative workflows.

Outside of adtech and more on the media advertising side, NBCUniversal shared that it has sold out its NBA ad inventory, and Paramount+ introduced show-specific ad placements, letting brands secure fixed positions within individual episodes. Finally, on the regulatory front, the SEC is investigating AppLovin’s data-collection practices.

There was a lot to catch up on with these important developments…see below for more.

A Whole Host Of New Ad Platform Launches…American Express, PayPal, And Duolingo

• American Express launches digital advertising platform Amex Ads (link/link)
  • What is it? Will enable brands to “serve high-spending Card Members relevant, contextual ads in the moments they are likely to engage, shop and spend with the brands they love”
  • Examples of how brands are using Amex Ads –
    • Marriott Bonvoy used Amex Ads to reach and convert American Express cardmembers who had booked a flight on AmexTravel.com, but had not booked a hotel (achieved 300% ROI increase vs target benchmark, per AmEx)
    • Tumi drove sales by reaching card members during and after booking travel using ads on AmexTravel.com and via a post-booking email from Amex Travel (purchases were 30% higher than target benchmark)
  • Amex Ads will initially become available on AmexTravel.com, and will ultimately expand to addtl Amex-owned platforms

• PayPal releases advertising platform, PayPal Ads Manager (link/link)
  • What is it? “A single, comprehensive platform that allows simple, streamlined management of [small bizs] ad inventory in a platform”, including –
    • Monetizing store traffic
    • Creating “valuable” new ad inventory (opens up previously unavailable inventory to reach “loyal, high purchase intent” shoppers)
    • Unify campaign mgmt
  • “Democratizing the power of retail media networks”: Enables small bizs to earn money from their existing store traffic w/ no upfront cost and no minimum commitment
  • Will be available in early 2026, starting in the US w/ the UK and Germany to follow

• Duolingo launches its own direct ads sales platform, Duolingo Ads (link/link/link)
  • What is it? A new direct ad sales platform that gives advertisers access to premium in-app inventory and creative formats, including character-led campaigns featuring its popular in-app mascots
    • The move shifts Duolingo away from relying solely on programmatic ads…: The Co offers interstitials that run after a lesson ends and gaming rewards for watching a video
    • …as the Co said programmatic ads did not always align with the app’s brand identity or quality standards: With Duolingo Ads, brands will now have the option to run character-driven campaigns, either fully animated spots starring the company’s mascots or short introductions that lead into the brand’s video content
  • Tapping into oppty to grow ad rev: Advertising currently contributes <7% of Duolingo’s total annual rev, which reached $748mn in 2024, vs a much larger share from paid subscriptions
  • Since 2015, Duolingo has partnered w/ Google AdMob to monetize its free user base and will continue the partnership in tandem w/ the new platform

Source

Amazon Expands Its AdTech Footprint Through New Microsoft & Adobe Partnerships

• Microsoft annc’d Amazon DSP as the preferred transition partner for Microsoft Invest customers (link/link/link)
  • In May, Microsoft annc’d a shift in strategy to transition away from media buying through their own DSP
  • Why chose Amazon DSP?
    • “Because of its ability to deliver exceptional results by leveraging real shopping behaviors, extensive reach, and premium placements across Amazon’s owned sites, apps, and connected TV properties, as well as high-quality third-party publisher inventory”
  • Microsoft Monetize will also become a preferred SSP in Amazon’s Certified Supply Exchange program
    • Which is intended to give advertisers using Amazon DSP easier access to Microsoft Monetize’s open internet ad inventory and deals
    • Advertisers that partner w/ Microsoft Monetize can now use special deal packages, including “Amazon Shopper Insights,” that match Amazon’s shopping data w/ Microsoft’s inventory
  • The transition will begin immediately, and Amazon and Microsoft are working together to support the migration of Microsoft Invest customers across countries in the NA, LATAM, EU, and APAC regions

• Adobe and Amazon have formed a partnership to support their mutual customers through media performance (link/link)
  • Amazon Marketing Cloud, Amazon’s data clean room for privacy-safe data collaboration, will be plugged into Adobe’s customer data platform, or CDP
  • There, the Cos’ joint customers can access aggregated data on how consumers discover, consider, and buy on Amazon, including –
    • Audience discovery (finding better prospects)
    • Campaign optimization (improving targeting and bidding in real-time)
    • Product/consumer insights (understanding how customers move from discovery to purchase across Amazon’s ecosystem)

On The AI Front…In AdTech, PubMatic’s Integration With NVIDIA Is Supercharging Its Ad Buying Platform + Some Key Insights From CMO’s On AI’s Uses In Mkting

• Pubmatic’s integration w/ NVIDIA is delivering 5x faster and smarter advertising decisions (link)
  • PubMatic said its use of NVIDIA technology for automated programmatic ad buying across the open internet has resulted in processing that is up to 5x faster than traditional systems
  • How does it happen?
    • Inference latency is reduced from the industry standard of 5-10 milliseconds to approximately 1 millisecond, achieving 85% fewer auction timeouts and unlocking mns in ad spend lost to tech restrictions
    • Using NVIDIA GPUs, PubMatic’s AI-powered decisioning algorithms respond in microseconds, thousands of times faster than consumer AI applications
    • Able to process live campaign data 2x and deliver insights 60% quicker by leveraging NVIDIA innovation
    • Reduces energy consumption by 30% while delivering better performance
  • What’s the overall benefit? “Helping publishers recover ad spend lost to latency and timeouts, while unlocking AI-driven optimization strategies that were previously possible only within walled gardens”

-> Pubmatic jumped +7.5% on the back of the announcements

• Some quick stats from Making Science’s latest report on how CMOs view AI reshaping marketing (link/link): Based on a Forrester Consulting Survey conducted in Aug 2025 of 269 CMOs w/ more than $50mn in ad spending
  • Use cases are still heavily skewed towards analytical vs creative workflows 
    • 55% of CMOs use AI for segmentation, while 51% use it for analytics and 45% use it for media planning
    • Vs 11% of CMOs use AI for content creation, and 14% use it for creative testing and optimization
  • Integration remains the biggest roadblock, with 76% of CMOs citing it as a barrier
    • Until Cos build stronger integration strategies, AI and marketing pilots will keep outpacing the ability to scale enterprise-wide programs
  • But regardless, investments have accelerated, with 66% of CMOs saying they are likely to invest in AI-powered marketing platforms within the next 12 mos

In Media Advertising… NBCU Has Nearly Sold Out Its NBA Ad Inventory & Paramount Introduces A New Ad Format

• NBCUniversal annc’d it has exceeded its advertising expectations for the return of NBA to NBC (link/link)
  • “Nearly all” inventory is sold out…some key stats –
    • Nearly 170 partners investing in the property
    • 20%+ of advertisers are new to NBCUniversal, broadening the Co’s portfolio-wide partnerships
    • NBA’s return to NBCU sparked interest from first-time brands, with nearly 10% new investments into the franchise at large
  • “Multi-platform, omni-channel approach” driving demand…70%+ of clients are investing cross-platform
    • ~30% of overall NBA investments have gone solely towards digital inventory
    • Investments in linear exceeded initial expectations by 20%+
  • The Co has officially sold out of all key positions w/ investments across all core categories, including Auto, Finance, QSR, Entertainment, and Retail
  • Also making its NBA inventory available programmatically on Peacock, “as part of its ongoing efforts to democratize access to its premium inventory”
    • Already seeing a “large” appetite for basketball programming from advertisers, w/ programmatic investments in college basketball up over 100% y/y

• Paramount+ is letting advertisers buy show-specific streaming ad spots (link/link)
  • Developed a new ad format called “streaming fixed units” –
    • Allows advertisers to buy a fixed ad placement within a specific episode of streaming television
    • For 7 days after the episode goes live, the ad will appear in the exact same position for all viewers who watch on demand
    • After 7 days’ elapse, fixed ad placements revert to the individually targeted, dynamic ad insertion formats that run across most Paramount+ inventory
  • Although the launch was only announced this week, Paramount+ has already been incorporating streaming fixed units into episodes of “Tulsa King,” which premiered on Sept 21
    • It will expand to other shows in 2026

Finally, There Was A Notable Update On The Regulatory Front, As The SEC Is Investigating AppLovin Over Its Data-Collection Practices

• The SEC has reportedly been probing AppLovin’s data collection practices (link/link)
  • The SEC is reportedly specifically looking into allegations that the Co violated platform partners’ service agreements to push more targeted advertising to consumers
  • Comes in response to a whistleblower complaint and multiple short-seller reports
    • Reports accused AppLovin of harvesting proprietary identifiers from other platforms in an unauthorized manner to track users across different websites and apps and retarget them with advertising
    • AppLovin CEOAdam Foroughi said that the short reports were “littered with inaccuracies” and denied creating “alternative accurate and persistent identifiers”
  • The SEC has not accused AppLovin of wrongdoing, and it was not clear how advanced the review is
    • Additionally, SEC probes don’t always result in enforcement actions, but they can lead to fines for Cos or corporate officials if the agency determines there were violations

-> AppLovin’s stock fell -14%, the most since April, on the back of the news 

• Disney raises admission prices for Orlando Disney World and Anaheim Disneyland (link/link)
  • Tickets for a one-day, single-park visit to Disney World or Disneyland will now cost (for the first time) more than $200 during peak times
    • e., the single-day, single-park ticket during the weeks of Christmas and New Year’s will increase +5% in Orlando to $209 and up +8.7% for Disneyland to $224 (up +126% over the past decade)
    • The rest of the one-day pricing tiers are increasing between 1.5% and 4.9%, which are notably smaller than last year’s increases (b/w 5.9%-6.5%)
  • The steepest increases are on Disneyland’s top-tier tickets
    • The Tier 6 one-day pass (purchased on highest-demand days) are jumping +$18 to $224 per adult
    • The longest and most expensive Disneyland ticket type, the five-day Park Hopper (lets visitors enter Disneyland Park and Disney California Adventure on the same day for up to 5 consecutive days) climbed +$39 to $655 (up +108% over the past decade)
  • Disney parks’ starting and high-end prices for tickets on sale through October 2026 remain unchanged
    • Disneyland kept its lowest-priced ticket for its slower season at $104/day (hasn’t changed since 2019)
  • Disneyland Resort price increases, overall, are the lowest price increases in several years, per the Co
    • Of the seven ticket tiers, five of them are increasing 3% or less
  • Demand is still strong for the holiday periods: It recently paused sales on one-day, one-park tickets to Magic Kingdom for this upcoming New Year’s Eve due to expected demand

• A new report says AI could erase 100mn US jobs (link)
  • As per a report by Senate Democrats released on Monday (Oct. 6^th)
  • A ChatGPT-based analysis from Sen. Bernie Sanders (I-Vt.), found that AI could wipe out both white- and blue-collar jobs
    • The report warns of the rise in “artificial labor,” which it says could “reshape the economy in less than a decade”
    • According to the findings, 89% of fast-food jobs, 64% of accounting roles, and 47% of trucking positions could be replaced over the next 10 years
  • The other side: Republicans argued that the US should lead global AI development and warned that excessive regulation could give countries like China a competitive edge

• We also came across some estimates on Netflix ad rev and viewership… (link)
  • Aug viewership rose +5.1% y/y
    • Avg daily viewership returned to growth in Q3: Up +3.5% y/y in Q3, vs -1.8% y/y in Q2
    • Top 10 title viewership accelerated seq and y/y: Up +19.8% y/y in Q3, vs +9.9% y/y in Q2 and much higher than yr-ago -0.5% y/y decline
    • Netflix’s top 4 streaming titles in August generated 22bn minutes collectively
  • Netflix’s full-yr 2025 ad rev expected to double y/y: Estimated to reach $2.2bn, which is slightly lower than cons estimates of $2.4bn, but double cons estimates for 2024 of $1.1bn cons